Denial of exemption u/s 11 for non-furnishing of copy of registration u/s 12A unjustified

Lala Gauri Mal Butail Trust Vs ADIT (ITAT Chandigarh)

ITAT Chandigarh held that mere non-furnishing of copy of registration u/s 12A cannot be held as a valid and justifiable reason for denial of exemption u/s 11 of the Act where such registration continues to exist and the assessee trust duly stand registered u/s 12A for the year under consideration.

Facts- The assessee Trust is registered u/s 12A of the Act and is running a Dharamshala at Shimla and Palampur besides carrying out other charitable activities. The assessee Trust has been regularly filing its return of income by claiming exemption u/s 11 and which has been allowed by the Department without raising any kind of dispute in the previous years. For the year under consideration, the assessee Trust filed its return of income on 09.12.2020 declaring total income at ‘nil’ after claiming exemption u/s 11. The return so filed was processed by CPC Bangalore and in terms of intimation issued u/s 143(1) dated 30.11.2021, CPC Bangalore has disallowed the exemption claimed u/s 11 and amount of Rs.61,77,016/- being the surplus has been brought to tax in the hands of the assessee Trust.

Conclusion- Held that during the appellate proceedings, one of the reason for denial of benefit u/s 11 was the assessee trust could not submit copy of its registration u/s. 12A originally granted on basis of which the past assessment were completed allowing exemption u/s section 11 of the Act. We find that in the assessment order for assessment year 1984-85, there is a clear mention of the assessee Trust being granted registration u/s 12A vide ld. CIT, Patiala letter dated 30.01.1986 and following the same, the assessment orders for assessment year 2010-11, 2011­12, 2012-13 and 2015-16 have been passed wherein the exemption u/s 11 has been allowed by the AO. Being an old matter, the assessee trust may not have produced copy of the registration originally granted u/s 12A, however, the factum of the assessee’s trust being duly registered u/s 12A and such a registration not being withdrawn is borne out of the assessment records for the earlier assessment years and in view of the same, mere non-furnishing of copy of registration u/s 12A cannot be held as a valid and justifiable reason for denial of exemption u/s 11 of the Act where such registration continues to exist and the assessee trust duly stand registered u/s 12A for the year under consideration.

FULL TEXT OF THE ORDER OF ITAT CHANDIGARH

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